Dynamic in-game advertising only accounted for a fraction of the nearly $80m in revenue in-game advertising generated in 2006. Still, the nascent industry is poised to overtake product placements, and potentially, by bringing a recurring revenue stream, even change the underlying revenue models for the entire gaming industry. Major game publishers are taking note. With projections of a billion dollar market opportunity by 2011, they’d be foolish not to.

Per the deal, PC and Xbox 360 versions of Guitar Hero III will participate. The ads will be contextual to the settings in the game’s storyline. That means, if a player is at an arena, ads will replicate the billboards or be placed on th scoreboard. If they play in a different venue, the ads will adjust accordingly. The saturation of ads will be limited as well. Estimates are that ads will be served for no more than ten minutes out every hour.

Similar ad inventory will also be sold and managed by Massive for skateboarding title, Tony Hawk Proving Ground.

For now, Massive has not commented on participating initial advertisers. Coke, McDonald’s, Verizon and General Mills have all worked with Massive before and could be potential participants. Massive’s website provides a list of other affiliated advertisers.

In-game advertising has been profiled in depth before on Metue. More information about how it and the similar concept of Dynamic Gaming could effect the industry can be found in the related articles listed below.